Coronavirus disruption tips Van Elle into the red

Aaron Morby 1 month ago
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Piling specialist Van Elle warned this morning that disruption caused by coronavirus will see it report an overall loss in the year to April.

Frank Nelson appointed chairman designate of Van Elle
Frank Nelson appointed chairman designate of Van Elle

The firm said it would delay publication of year to April 2020 results until August in light of the practical challenges presented by the current situation.

Van Elle also revealed that former Galliford Try chief financial officer Frank Nelson had been appointed chairman designate to take over from Adrian Barden.

In a trading statement, chief executive Mark Cutler said revenue in April was 80% down on pre Covid-19 forecast levels.

He said that this meant group revenues for the year would be down just 4% at around £85m.

But the significant, adverse impact of the Covid-19 outbreak on the final six weeks of the year impacted profitability such that, subject to audit, the board expected to report an underlying pre-tax loss for the year.

At the start of June 30-40% of projects had resumed across the housing and general piling divisions, while the specialist piling, rail and geotechnical divisions were operating at  60-70% of pre Covid-19 levels due to greater exposure to infrastructure sector activity.

Cutler said: “It is encouraging to see a gradual return to work underway across our markets.

“We hope to see this trend continue in the coming weeks and are working with customers to support their plans.  

“Thanks to the actions taken to preserve cash and the commitment of our employees, we are in a strong position to manage the return to activity.

“Having been able to retain our market leading capabilities and with a strengthened financial position, we are well-placed to benefit from significant opportunities as construction markets recover and new major infrastructure investment programmes commence.”

Cutler said that while it would still take time for new project starts to gather momentum in some sectors Van Elle was encouraged by developments in its targeted infrastructure markets.

The specialist has secured preferred bidder status for its first contract on High Speed 2 and recently picked up two of the three regions on Highways England’s new four-year ground investigation framework, both of which are expected to commence during the first half of the financial year.

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